jilipark Germany Avoids Recession, but Weak Growth Weighs on Europe
Europe struggled to turn around its economic fortunes in autumn, as Germany, the region’s powerhouse, reported weak growth, offsetting stronger expansion in the continent’s southern countries, the European statistical agency reported on Wednesday.
Economic output in the 20 countries that use the euro grew 0.4 percent from July to September versus the previous quarter. Compared with a year earlier, the eurozone grew 0.9 percent.
The anemic pace is keeping Europe behind the United States, where the economy grew at an estimated 2.8 percent annualized rate in the third quarter, powered by consumer spending and investment.
“Europe’s recovery is falling short of its full potential,” Alfred Kammer, director for the region at the International Monetary Fund, warned last week at a meeting in Washington.
Dragging Europe down is a loss of competitiveness that has continued to weigh on businesses — a problem that Mario Draghi, former head of the European Central Bank, said in a recent landmark report had put Europe’s “reason for being” at risk.
A key reason is that Russia’s war in Ukraine is still taking a toll, the I.M.F. said. Although European governments and businesses have worked to adapt to the loss of Russian gas, stubbornly high energy prices have continued to hammer industries, especially in Germany, whose vaunted manufacturing sector has borne the brunt of the pain, the fund said.
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